Energy Technology Research

Summary

Current efforts on energy R&D, both at member state and EU level, are insufficient to face the twin challenges of climate change and energy-supply security, according to the European Commission.

"All member states have their own research programmes on energy, mostly with similar objectives and targeting the same technologies," the EU executive said, adding that additional public and private research "complete a picture of scattered, fragmented and sub-critical capacities".

To put Europe on course for a low-carbon future, the Commission has asked EU member states to support a more targeted research effort, outlined on 10 January 2007. The proposal, Towards a European Strategic Energy Technology Plan (SET Plan), is a careful balancing act between ambition and humility as Brussels knows that research policy is still firmly rooted at national level.

The plan does not therefore propose new radical initiatives but rather seeks to build on existing efforts, such as the EU research framework programme (FP7), European technology platforms and the European Institute of Technology. And - for now at least - it shies away from proposing new EU budgetary means of reaching its objectives.

Issues

On 22 November 2007, the Commission followed up with a proposal for a Strategic Energy Technology (SET) plan designed to invigorate the development of low-carbon technologies in the EU. The plan was presented alongside two studies providing an overview of energy research capacities in EU member states.

"The strategic element of the plan will be to identify those technologies for which it is essential that the European Union as a whole finds a more powerful way of mobilising resources," the Commission stated.

EU lagging behind in energy research

At the heart of the initiative are concerns that Europe is lagging behind in energy research spending. According to the Commission, while the EU average (FP7 and Euratom) was raised to €886 million per year for the period 2007-2013, the US Energy Bill proposed $4.4 billion for 2007 alone and $5.3bn for 2008 and 2009 respectively. Regarding non-nuclear energy research (renewables and energy efficiency), the EU has earmarked a comparitively meagre €1.175 billion for the period 2007-2013, or some €168 million per year (EurActiv 19/12/07).

And it is not just the public sector which is falling behind. While venture capital flows toward clean technologies have kept increasing in the US, Japan and China, the same trend cannot be observed in the EU. R&D investment in the energy sector has even decreased since the 1980s, and most European energy firms spend less than 1% of their net sales on clean technology innovation, according to the Commission.

"In order to be able to compete in global markets, the European Union and its member states both have to increase their investment," the Commission stresses. "If we fall behind in the intensifying global race to win low carbon technology markets, we may need to rely on imported technologies to meet our targets, missing out on huge commercial opportunities for EU businesses," the Commission warned.

Public sector called upon to take the lead

According to the SET Plan, public intervention in support of energy innovation is "both necessary and justified" in order to overcome the 'valley of death' market gap for low carbon technologies that is characterised by a lack of "market appetite" and business incentives. 

"Industry should be prepared to increase investment and take greater risks," the plan says. But "it is the task of governments to lead" the process, according to EU Energy Commissioner Andris Piebalgs, who said a new EU directive on renewable energies should instil industry confidence and increase private investment flows. 

A 'collective endeavour'

The SET Plan calls for greater cooperation at European level to boost innovation and proposes the following new measures:

• European Industrial Initiatives in six areas: wind, solar, bio-energy, nuclear fission, carbon capture and storage (CCS) and electricity grids. The initiatives will be funded in different ways, such as public-private partnerships, a pooling of resources between member states and other measures proposed in the January communication on the SET Plan (see EurActiv 20/11/07);
• A European Research Alliance featuring research coordination between universities and specialised institutes;
• Establishment of a high-level Steering Group on Strategic Energy Technologies;
• A new Energy Technology Information System, and;
• Organisation in 2009 of a European Energy Technology Summit.

In 2008, the Commission also intends to "develop its ideas" for planning the transition from a static energy grid characterised by large power-producing facilities towards a more dynamic, pan-European energy grid that can better integrate "more distributed, local generation of power," according to Research Commissioner Janez Potočnik.

Who is going to foot the bill?

The Commission is looking for an endorsement by EU member states of its proposed industrial initiatives during the March 2008 Spring European Council. But precisely how and by whom the SET Plan's ambitions will be financed will remain a subject of potentially heated debate over the course of 2008, with the Commission expected to propose a separate communication on SET Plan financing by the end of the year.

Positions

A number of member states have stated their views regarding the proposed six industrial initiatives. Austria in particular has expressed strong reservations about the promotion of nuclear energy. France on the other hand is pushing to make sure its global leadership in nuclear technology is reflected in the plan and backed by the EU.

But, unsurprisingly, it is the financing issue which is proving painful to most EU countries. According to the Commission, it is clear that existing EU funds can only provide limited assistance and that member states should do more. "Frankly, we do not have enough money from the Community budget so we have to see whether the member states are actually putting their money where their mouth is," Matthias Ruete, director-general at the Commission's Energy and Transport Directorate, told EurActiv in an interview.

Shell, the international energy group, said "human talent and financial resources" were the two key elements of making the Commission's SET Plan a success. "Technology implies much more than research and development. It is the whole sequence of creating scientific ideas, turning those ideas into technological innovations or tools, and then applying them," said Hans van der Loo, head of Shell's EU liaison bureau in Brussels. "Governments can make financial resources available themselves, but if these are not there, it should consider how to attract private funds into the early stages of development."

The SET Plan has drawn considerable criticism from renewable energy groups and environmentalists.

EREC, the European Renewable Energy Council, "very much regrets" the lack of emphasis on heating and cooling in the proposed Industrial Initiatives. "This represents a serious flaw if the European Union wants to address the future of the EU energy supply," said EREC Policy Director Oliver Schäfer in a statement. 

EUREC Agency, representing renewable energy research centres, agrees that heating and cooling have been sidelined in the plan. The association also perceives an "inconsistency in the EC's aim to develop a diverse portfolio of clean, efficient and low-carbon energy technologies and the significant bet it is making on hydrogen and fuel cells as the vehicle propulsion technology that will win before 2050". More work on high capacity batteries in transport applications is needed, it said.

The European Wind Energy Association (EWEA) "regrets that the Plan does not address the continued need to reverse the irrational imbalances in national and EU research budgets". "The wind energy sector would have liked to see a more detailed and clear financial strategy and priority-setting that takes into account past allocations of R&D funds between the different energy technologies," EWEA said in a statement.

Foratom, the association representing the nuclear energy industry in Europe, welcomed the SET Plan's recognition of nuclear as a low-carbon energy source. "The document recognises officially that nuclear power is a key part of EU energy policy and contributes along with other low-CO2 energy sources to forging the EU's low-carbon economy," the association said in a statement. 

For Andrew Warren, senior advisor at EuroACE, the European Alliance of Companies for Energy Efficiency in Buildings, greater emphasis should be placed on demand reduction rather than on finding monies for expensive supply-side technologies. Almost all efficiency upgrades in the buildings and construction sectors, which account for up to 45% of the EU's total CO2 emissions, are cost-effective, according to Warren.

Green MEP Claude Turmes slammed the SET Plan as "an all and nothing approach". "By trying to please a variety of energy lobbies, the plan will inevitably fall short of providing a real incentive for any," he said, expressing the Greens/EFA group's hope that "EU member states will ignore this plan and instead focus on the efficiency and renewables plan being prepared by the Portuguese Presidency".

Frauke Thies, energy expert at Greenpeace,  called the plan "unstrategic" and criticised what the group considers an excessive focus on "expensive technologies that either bear an unacceptable environmental cost, like nuclear energy, or that are mere distractions, like carbon capture and storage". Thies also argued that the plan focuses too much on "an outdated model of large and centralised power plants" that is "incompatible with an innovative and sustainable energy system based on the efficient use of energy, generation of renewable electricity and heat, and a smart network and operation of electricity grids," she said.

Timeline

• 10 Jan. 2007: Commission outlines SET Plan proposal as part of its energy and climate-change package.
• 22 Nov. 2007: Commission tables detailed proposal (EurActiv 23/11/07).
• 28 Feb. 2008: EU Energy Ministers endorse SET Plan.
• 14 March 2008: Spring Summit endorses SET Plan and outlines financing options.
• 9 July 2008: Parliament adopts own-initiative report on SET Plan.
• 7 Oct. 2009: Commission presents communication on financing low-carbon technologies (EurActiv 07/10/09).
• 21-22 Oct. 2009: SET Plan summit to agree financial plan.

External Links

EU official documents

• Commission:SET-Plan website
• Commission:A European Strategic Energy Technology Plan (SET-Plan)COM(2007) 723 FR FR DE
• Commission: Set-Plan -Key elements Q&A Q&A Press release
• Commission: Set-Plan -Technology map Capacity Map of Energy
• Commisison:Impact assessment on SET-Plan Summary

Business & Industry

• European Renewable Energy Council (EREC):SET-Plan press release(22 Nov. 2007)
• European Wind Energy Association (EWEA):Commission’s technology plan brings hope but lacks clarity(22 Nov. 2007)
• European Renewable Centres Agency (EUREC):EC’s SET Plan prepares Member States for the “massive integration of renewable energy sources”(22 Nov. 2007)
• Foratom:Nuclear, a “Clean” Technology, says EC SET-Plan(22 Nov. 2007)
• European Gas Research Group (GERG):Position paper on SET-Plan(23 Nov. 2007)
• Shell:Statement on European Strategic Energy Technology Plan (SET-Plan)
• Shell:Technology Report
• Zero Emission Fossil Fuel Power Plants (ZEP):Industrial-scale CO2 capture and storage projects required urgently Europe-wide(1 March 2007)
• European Hydrogen and Fuel Cell Technology Platform:SET-Plan Hearing of the HFP(29 March 2007)
• European Technology Platform Smart Grids:Strategic Research Agenda(2007)

NGOs and Think-Tanks

• Greenpeace:'(un)-Strategic Energy Technology Plan': Commission fails to choose between winners and losers(22 Nov. 2007)
• Friends of the Earth Europe:Energy Action Plan still too feeble to fight climate change(2 March 2007)

Blogs

• Blogactiv:Total on strategic energy technologies

Non-assigned links

• Commission:Towards a European strategic energy technology planCOM(2006) 847 FR FR DE
• Commission:Towards a SET-Plan - Layman summary(10 Jan. 2007) FR FR DE
• Commission:Joint Research Centre webpage on SET-Plan
• EU Council:Conclusions on a European strategic energy technology plan(28 Feb. 2008)